Bill Daley proposes plan to end pension deadlock

CHICAGO – In his first public remarks since stepping into the race for Illinois governor, former White House chief of staff Bill Daley on Monday criticized both Gov. Pat Quinn and Attorney General Lisa Madigan for not doing more to break a logjam over fixing the state's nearly $100 billion pension crisis.

Daley condemned Quinn for not showing more leadership on the pension crisis, saying he should have threatened to veto any legislation other than a tough proposal supported by the Illinois House. He criticized Madigan, another possible candidate for governor, for failing to give an opinion as the state's chief legal officer on the constitutionality of two rival pension reform plans that have split lawmakers.

Daley, who last week announced he is exploring a Democratic primary challenge to Quinn, outlined a three-part plan he says would end deadlock in Springfield and lead to a solution to the state's worst-in-the-nation pension crisis that costs taxpayers $17 million each day to finance.

Daley's remarks came two days ahead of a special session of the Democrat-controlled Legislature to address the pension crisis again. Quinn called the special session, starting Wednesday, after lawmakers adjourned May 31 without taking action.

House Speaker Michael Madigan has proposed unilaterally imposing pension changes on state workers, including a higher retirement age. A dueling plan being pushed by Senate President John Cullerton in his chamber would give retirees choices over benefits.

By almost all accounts, Madigan's bill would save the state much more money. But Cullerton and other senators argue that their bill, which has the support of unions, would end up saving the state at least some money by surviving an expected constitutional challenge, since state employee retirement benefits are currently protected by the state constitution.

The Senate has rejected Madigan's plan but passed Cullerton's. Madigan has refused to call the Senate bill for a vote in the House, insisting that Quinn and Cullerton try harder to pass his plan in the Senate.

"The governor should make it very clear, emphatically clear, and then stick to this, that he will veto the Senate bill because it doesn't go far enough," Daley said at a news conference in Chicago. "The House bill cuts three times the pension deficit as the Senate bill. Therefore, that's the bill that can get us furthest to solve this problem."

A spokeswoman for Quinn dismissed Daley's criticism, saying Quinn has fully backed the House proposal and has fought hard to get it passed. She reiterated Quinn's position that Madigan and Cullerton must work together to put a bill on the governor's desk.

"He has met at length, countless times, with the leaders and legislators on this issue and fought hard to pass the House version. But he cannot act alone," Quinn spokeswoman Brooke Anderson said in an email.

Daley said the attorney general should be asked to write an opinion on the constitutionality of both bills.

"This has been the root of the problem over the last six months," Daley said. "The Senate has been stuck on the fact that their bill is constitutional and all other bills are not constitutional. So I think it's time the attorney general, the chief legal officer of this state, step forward and opine on this question."

If the attorney general believes she has a conflict of interest — either because she may run for governor or because her father is House Speaker Michael Madigan — then she could appoint another attorney to analyze the proposals, Daley said in response to a reporter's question.

In an emailed statement, Lisa Madigan's office said the attorney general is providing the Legislature with legal advice and analysis on the constitutional issues. Madigan said the constitutional questions ultimately would be resolved by the courts, not the attorney general, and that she sees it as her job to keep the state's legal options open while building a strong legal argument to ensure the legal survival of whatever plan emerges from the Legislature.

Daley said the third part of his plan is to earmark at least half of the savings in reduced pension contributions — an estimated $2.5 billion annually, according to the Chicago-based Civic Federation — for public education. That would give both Democrats and Republicans a positive reason to support pension reform, Daley said.

"The reputation of this state is at stake," Daley said, citing recent downgrades to Illinois' credit rating because of the Legislature's inaction. Such downgrades cost the state millions of dollars in interest on bonds.

In calling for the veto threat, Daley referred to his stint as secretary of commerce under President Bill Clinton and as chief of staff for President Barack Obama. He is the brother of Richard M. Daley, Chicago's mayor for 22 years.

"I had the pleasure of working for President Clinton and President Obama and often they had to threaten the Congress with vetoes. And it works," he said.

A veto threat could be effective in Illinois if the Legislature believes the governor will stand behind it, he said.